‘We are not doomed to lose jobs’

Published 4:37 pm Thursday, March 16, 2017

like Stephen Goldberger. I even count him as a friend. I believe he was a good doctor, but he clearly slept through whatever economics classes he took in college (“Trump supporters will be sorry,” Friday, March 10).

First, he is wrong about the U.S. economy. We are not doomed by automation. Inventions like automobiles and refrigerators put wagon makers, livery stables and block-ice delivery men out of work, yet the U.S. economy continued to grow. Automation won’t eliminate workers because it still takes people to invent the robotics, build and install the equipment, run and maintain the machines and supervise the process. Like life itself, the only constant in economics is change.

Second, we are not doomed to lose jobs to countries with lower wages. The communist Chinese government embraced pseudo-capitalism because it created billions of jobs, raised income levels, created wealth and reduced poverty. With increased prosperity comes labor unions and demands for better working conditions, higher wages and a cleaner environment. All this has made doing business overseas less competitive, especially when you factor in the shipping costs and the logistical and human resource challenges of manufacturing off shore. The quality of workmanship by U.S. workers is still the best in the world, and now many companies are moving their manufacturing facilities back to the USA. A more streamlined regulatory system and a competitive corporate income tax rate will accelerate the return of manufacturing.

Third, obsessing about the so-called 1 percent and more income redistribution will only harm our economy. When I was majoring in economics at UC San Diego, there was a lot of buzz about implementing a negative income tax — much like the current Earned Income Tax Credit — to replace all welfare programs. Our professor gave each of us access to a computer model of the U.S. economy, and we were allowed to set up our own negative income tax with whatever parameters we thought appropriate. Being a good young liberal, I set up a generous system, plugged it into the computer and watched the cards come spitting out. Inflation began to rise quickly, and soon I had triple-digit inflation. Unemployment rose too. The last message from the computer was something like, “The workers have no incentive to work, there has been a workers’ revolt, and your economy has failed!”

You see, I had ignored one of the most basic rules of economics: There is no such thing as a free lunch. Or as Margaret Thatcher so wisely said, “The problem with socialism is that eventually you run out of other people’s money.”

Paul D. Hoffman lives in Prospect and is a retired government executive/business leader, a conservation consultant and an avid outdoorsman. His email address is paul@pauldhoffman.com.